I am fairly confident that ai16z and Virtuals will deliver strong performance in Q1 2025. However, I am even more confident that TAO will outperform the market in Q1/Q2. Even if it doesn't outperform agent-related coins, the risk-reward here looks very enticing and creates some highly profitable opportunities.
The introduction of dynamic TAO (dTAO) has not been fully factored into the market. TAO is down 13% this month, while Virtuals have surged 258% and ai16z has posted an impressive 565% gain. For whatever reason—likely the lack of agentic properties—TAO did not benefit from this recent AI-driven rally.
Several reasons stand out for why dTAO could positively impact TAO's token price:
- Improved Emissions Model: Currently, TAO emissions are determined by validator weighting, with little consideration for a subnet's performance or contribution. Dynamic TAO introduces a market-driven model where subnets compete for emissions by staking TAO in subnet-specific pools. More staked TAO translates to a larger share of emissions, incentivizing performance and reducing the incentive to sell. This shift gives subnets and users more control over emissions and creates stronger alignment with network growth.
- New Speculative Markets: Dynamic TAO opens up a whole new market for speculation, similar to what we’ve seen with successful projects like Virtuals, pump.fun, and Polymarket. Introducing subnet tokens and TAO pair pools boosts liquidity and drives more activity within the ecosystem. As more people participate in these markets, the demand for TAO grows, further increasing its value.
- EVM Compatibility: With the addition of EVM compatibility, TAO stands to benefit from the surge in interest surrounding agentic systems. By integrating into the Bittensor ecosystem, agents gain access to TAO's expanding liquidity pools and potential value appreciation. Given the rapid rotation of capital in the AI sector, no launchpad, agent, or framework should be seen as a cemented leader. TAO has a strong opportunity to emerge as a major competitor in the agent launchpad wars.
NFA, but an LTF-levered long position in TAO seems like one of the best idiosyncratic risk rewards in the space right now.
The introduction of dynamic TAO (dTAO) has not been fully factored into the market. TAO is down 13% this month, while Virtuals have surged 258% and ai16z has posted an impressive 565% gain. For whatever reason—likely the lack of agentic properties—TAO did not benefit from this recent AI-driven rally.
Several reasons stand out for why dTAO could positively impact TAO's token price:
- Improved Emissions Model: Currently, TAO emissions are determined by validator weighting, with little consideration for a subnet's performance or contribution. Dynamic TAO introduces a market-driven model where subnets compete for emissions by staking TAO in subnet-specific pools. More staked TAO translates to a larger share of emissions, incentivizing performance and reducing the incentive to sell. This shift gives subnets and users more control over emissions and creates stronger alignment with network growth.
- New Speculative Markets: Dynamic TAO opens up a whole new market for speculation, similar to what we’ve seen with successful projects like Virtuals, pump.fun, and Polymarket. Introducing subnet tokens and TAO pair pools boosts liquidity and drives more activity within the ecosystem. As more people participate in these markets, the demand for TAO grows, further increasing its value.
- EVM Compatibility: With the addition of EVM compatibility, TAO stands to benefit from the surge in interest surrounding agentic systems. By integrating into the Bittensor ecosystem, agents gain access to TAO's expanding liquidity pools and potential value appreciation. Given the rapid rotation of capital in the AI sector, no launchpad, agent, or framework should be seen as a cemented leader. TAO has a strong opportunity to emerge as a major competitor in the agent launchpad wars.
NFA, but an LTF-levered long position in TAO seems like one of the best idiosyncratic risk rewards in the space right now.
Would add that not only does TAO look like a comfier hold if you feel the markets looking frothy, but based on prior performance over the past year and the way onchain capital has rotated within memes and agents, TAO *could* act as a potential hedge to agent tokens.
There's only so much upside available for AI tokens right now compared to DeFi and the larger market. Until CEX listings for agent tokens (which could potentially disappoint and shatter the hype), dTAO seems like a more sustainable play that rides on the back of this period of highly rotational capital.
All speculation, but I could see a nice barbell play here between TAO and agent tokens being a very successful portfolio in H1 2025.
There's only so much upside available for AI tokens right now compared to DeFi and the larger market. Until CEX listings for agent tokens (which could potentially disappoint and shatter the hype), dTAO seems like a more sustainable play that rides on the back of this period of highly rotational capital.
All speculation, but I could see a nice barbell play here between TAO and agent tokens being a very successful portfolio in H1 2025.
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